Roughly 1,800 patients will see $2.6 million in medical debts disappear because of charitable payments by the Minnesota Nurses Association, the union that represents hospital nurses throughout the state.
The union announced on Thursday that it would pay off the patients’ debts in conjunction with the anniversary of a strike by its nurses against five Allina Health hospitals in the Twin Cities.
“MNA Nurses decided to pay back the community that supported them during the strike against Allina Health,” the union said in a statement Thursday morning.
More details are expected Monday at a news conference that will include Minnesota Attorney General Lori Swanson, who has pressed a variety of cases against medical debt collectors. The union’s actual cost of resolving the patients’ debts will be closer to $28,000, an MNA spokesman said, because collection agencies often accept pennies on the dollar for medical debts.
More than 4,000 Allina nurses conducted two strikes in June and in the fall of 2016 amid a contract dispute centered on health benefits. Allina sought to shift the union nurses to its corporate health insurance, while the nurses fought to protect a richer union health plan, which they felt was necessary given their high risks of on-the-job injuries and illnesses. Nurses ultimately agreed to the switch in exchange for other financial compensation.
Medical debt emerged as a leading source of personal bankruptcy filings a decade ago, and it has become a larger dilemma since the passage of the federal Affordable Care Act, which expanded health insurance coverage to millions of Americans. While millions of previously uninsured patients now have coverage — meaning that hospitals don’t have to write off their bills as charitable care — many are left with coinsurance payments and deductibles they cannot afford.
The state’s hospitals reported a combined $162.9 million in bad debt in 2015, according to the most recent uncompensated care data from the Minnesota Department of Health.
Swanson’s advocacy in this area has largely been on collection tactics used by hospitals and their contractors. She reached a settlement with Allina in 2009 that required the health system to refund $1.1 million to patients who were charged high interest rates for their debt. She also reached a $2.5 million settlement in 2012 with Accretive Health Inc., a hospital revenue company, over the collection practices it used to reclaim debts from patients of Fairview Health Services.